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Thursday, December 20,2007

Cargill buys West Coast packer

by WLJ
Cargill, the nation’s second largest beef processor, announced their intentions to purchase California’s largest meat packing operation, Beef Packers Inc. (BPI). This is Cargill’s first packing plant in the western U.S. and a move that further consolidates the meat packing industry. Cargill Meat Solutions Corp. has made a preliminary agreement to acquire the Fresno, CA-based company and all its subsidiaries. Cargill is buying the slaughter operations of BPI, the processing operations of Fresno Meat Co., the retail meat distributorship known as RPM Beef Inc., steak cutter and restaurant distributorship King-O-Meat, Inc. and live cattle and meat transportation company Ore-Cal Transportation, Inc. The transaction is expected to be completed by the end of the year. The companies have annual sales of $500 million. According to BPI officials, most of the company’s leadership team will stay on with Cargill, and the merger means the company will become an even bigger player in the U.S. cattle and beef market. “This is a tremendous growth opportunity for our companies and our people who helped build them,” said Dennis Roth, president of BPI. “Cargill has a history of investing in its people and facilities. Having access to those resources will help us move to the next level of success.” BPI is currently owned by the Roth, Maxey and Pestorich families; most of the involved family members have agreed to stay on with the company. “We are pleased that the companies will remain in the hands of a family-owned business; we share similar cultures and values,” said Roth. The company, started in the 1930s and originally known as Fresno Meat Packing, was founded by the grandfather of current partner, Mike Pestorich. The Fresno business will become a part of the Taylor Beef business unit within Cargill Meat Solutions business. “These are excellent companies, with great people and a history of family ownership,” said Mike Coleman, president of Cargill Taylor Beef. Cargill Taylor Beef processes both mature and fed cattle, providing boxed beef, boneless beef and custom-formulated ground beef with regional service capabilities on the East Coast through its facility in Wyalusing, PA, and to the central U.S., through its facility in Milwaukee, WI. Coleman said the acquisition of BPI and its subsidiaries would help its market share in the western U.S. and that BPI’s business plan fits well with what Cargill Taylor Beef does. Coleman also said, “Cargill is committed to helping our customers succeed by providing customized services. We’re also committed to the growth of the beef industry, which is a positive for the Fresno team, area cattle producers, and the Fresno Community.” According to Roth, Cargill officials have indicated they will continue with the current business plan that BPI has in place which includes a $15 million, 70,000 square foot expansion to the current 220,000 square foot plant, which will allow for a second slaughter shift. “We are already in the midst of fairly major expansion,” said Roth. “Cargill has said it will complete that and add on even more slaughter and processing volume in the future.” Currently, BPI primarily processes cattle over 30 months of age, focusing on cull cows and bulls, Holstein heiferettes and other older dairy-influence cattle. The company does some custom processing for independent cooperatives, however, Roth said it is a very small portion of their overall business. “We do three or four loads of Western Grassland cattle a week and just a few of the Hearst Ranch cattle on the custom processing side,” he said. “We used to process for Laura’s Lean, but then they moved out of California. We don’t do much on that end, but we will continue to keep that in our business plan. Overall, we don’t do many ‘fed’ cattle.” Roth said Cargill will continue to focus on the processing of 30-month-and-older cattle and dairy-influenced animals, but will expand to include younger animals, also mostly dairy-based. “The main objective of Cargill is to keep BPI as a processor of cows, bulls and dairy cattle,” said Roth. “They will probably move towards processing more 20-month cattle, but most of them will continue to be Holsteins or other dairy influence. It doesn’t look like we will include a lot of fed cattle.” “By producing in California, Cargill will get closer to West Coast ports, a move that could pay benefits if Japan and South Korea ease restrictions on U.S. beef,” said livestock analyst Daniel Vaught at A.G Edwards. He added that, “The move could lower transportation costs, an important factor as energy costs soar.” Roth said that Cargill had been showing interest in purchasing BPI and its subsidiaries over the past 18 months, and said the offers just kept getting better and better, adding that the last offer from the company was too good to refuse.

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Thursday, December 20,2007

Prevent Pasteurella pneumonia—Boost marketability

by WLJ
With volatile feed costs that have reached record highs in recent months, feed yards want calves this fall that will perform from day one without added worry of sickness. That means buyers will be willing to pay more for healthy cattle, says Dr. Joe Dedrickson, director of the Merial Large Animal Veterinary Professional Services. “Feed yards can’t afford sick cattle this fall,” he explains. “The stress of weaning and shipping can lead to bovine respiratory disease (BRD), and with profit margins tight, any setback due to BRD can be devastating to the bottom line. Prevention is key.” Treatment costs alone for BRD add up quickly. One feed yard study reported that the average BRD treatment cost for one animal in a 1,000- to 7,999-head feed yard was $11.09 and in an 8,000-head or more feed yard, the cost increased to $16.26. “These numbers only account for actual treatment costs—not losses in weight gain and grid performance,” Dedrickson says. By combining medical costs and gross carcass value, one study determined that heifers treated at least once for BRD had lower marbling scores than those never treated, resulting in a 37.9 percent reduction in carcasses grading USDA Choice or above. Heifers that never had to be treated produced a net return of $11.48 per head more than heifers treated once for BRD and $37.34 per head more than those treated two or more times. Dedrickson says a high percentage of diagnosed cases of BRD are a result of Pasteurella bacteria, which is why feed yards will be looking for cattle that have been through a sound preconditioning program that includes vaccination for Pasteurella. “Much of the financial losses caused by BRD occur during the feeding and slaughter phases due to lost weight and reduced numbers of cattle grading Choice and above,” he says. “That is why it’s important for feed yards to find cattle that have been vaccinated against Pasteurella and viral respiratory pathogens.” Vaccinating with Respi-shield HM helps build immunity to Mannheimia (Pasteurella) haemolytica and Pasteurella multicoda, two of the leading causes of BRD. These two organisms are part of a complex group of bacteria and viruses that can cause shipping fever. Pasteurella bacteria inhabit the upper respiratory tract of healthy cattle. Pneumonia occurs when the Mannheimia haemolytica and Pasteurella multicoda migrate to the lungs. Dedrickson says the stress of weaning and shipping is the final causative factor that completes the disease complex—resulting in BRD. The complex nature of this disease is why Dr. Gerald Gibson of Gibson Veterinary Clinic, Montezuma, KS, recommends that all of his cow/calf clients use Respi-shield HM to vaccinate for Pasteurella pneumonia. “Over the years, I have seen a lot of Pasteurella problems. We were always vaccinating calves with virals, but we were leaving them vulnerable to the bacterial end of the complex,” he explains. “Ideally, all cow/calf producers would vaccinate calves with Respishield HM before they are subjected to the stresses of weaning and exposed to the outside world.” He adds that even calves that may have come from the same ranch and are not considered high- risk should be vaccinated. For calves to develop immunity, Dedrickson recommends producers vaccinate two to four weeks before weaning. “The key to getting a good immunologic response to vaccination is to vaccinate before putting cattle through stressful events such as weaning and transportation to feed yards,” he says. Gibson says this protocol is ideal. However, if vaccination did not occur before weaning, Respishield HM can still be used effectively during the backgrounding phase. “We vaccinate incoming stocker cattle also because they do not have any immunity against this important disease,” he explains. The added level of immunity to BRD that can come from vaccinating against Pasteurella can help producers add value to calves this fall and help feed yard managers protect profits. “Prevention of BRD ultimately lies in the hands of cow/calf producers, and feed yards know this,” Dedrickson says. “By using a Pasteurella vaccine, producers can improve the health and marketability of their calves and feed yard managers can rest assured cattle will hit the ground running.”

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Thursday, December 20,2007

Packers trim harvest for second week

by WLJ
After very light live cattle trade a week earlier, beef packers cut plant operating hours again last week to reduce total harvest significantly in their efforts to boost the sagging cutout values. However, the move appeared to have little effect and at mid-week, lower wholesale prices spurred heavy trade, allowing packers to move 482 loads of Choice and Select fab cuts and 134 loads of trim and grinds out of cold storage and into the hands of retailers. Most of the decline in cutout values came on middle meats, with rib roasts and boneless ribeyes leading the way lower, although there was discounting throughout the middle meat complex along with some light discount on rounds and shoulder clods. There has been very little out front beef trade in recent weeks, which has hurt the beef cutout. Unless contracting picks up, the trend could continue to hurt cutout prices in the weeks ahead until tighter fed cattle availability starts to impact the market. Last Thursday, the Choice cutout stood at $145.34 on the Choice and $136.83 on Select product. Harvest for the week, despite packer cutbacks at mid-week stood at 504,000 last Thursday compared to 490,000 head for the same period a week earlier and 507,000 in 2006. Analysts said it was likely packers would continue to slow chain speeds late in the week in an effort to bolster the cutout. The reduction in kill levels and unsustainable beef cutout kept packers on the sidelines in the fed cattle battle, with very few animals trading hands as of last Thursday. As of mid-day last Thursday, feedlot asking prices stood in the $95 live and $150 dressed range, with packers bidding $90-91 live and $142-143 dressed. The prior week trade came in a range of $91-93.50 live and dressed sales traded from $144-146.50. Analysts last week agreed that fed cattle sales would come in at steady money in a range of $92-93 live and $142-$144 dressed, although there was little hope for trade to develop until Friday, perhaps not coming until after USDA released the Sept. 1 cattle on feed report. Average pre-report estimates showed analysts were expecting total cattle on feed numbers to be down 6.5 percent, placements 7.5 percent below August 2006. and the number of cattle marketed in August up .8 percent above last year. “If the report does come out this way, it is again going to be supply friendly for the fourth quarter of this year, and this is what had guys covering short December and February positions along with outright net new February buying going into the close (on the Chicago Mercantile Exchange or CME),” said Ehedger analyst Troy Vetterkind last Thursday. “I would really continue to look at lower October live cattle futures as a buying opportunity.” He said he expected corn prices on the Chicago Board of Trade to also move higher which would add pressure to cattle markets although fed cattle prices are expected to remain strong into the first quarter of 2008. Jim Robb, director of Livestock Marketing Information Center, agreed and said last week that the corn market bears watching, particularly now that soybean futures have moved above the $10 level. “Corn is going to have to buy acreage again next year and in the first quarter, I think that higher prices are really going to pose a risk and some of the people planning to sell heavy calves or cattle off wheat pasture could be faked out this fall,” he said. Cow beef markets last week continued their seasonal downtrend as more cattle are shipped to town after the fall sort. The cow beef cutout value fell nearly $4 from the prior week to reach $109.14 last Thursday, with the 90 percent lean trading more than $6 lower than the prior week at $131.08 and the 50 percent trim mostly steady at $49.98. Feeder cattle Western Video Market (WVM) got a good test of the feeder cattle market last week when they sold 50,000 head on video from the Haythorn Ranch near Ogallala, NE. WVM co-founder Ellington Peek said that owing to a large amount of feed in the area, calves sold very well in the Nebraska region. “There was so much feed in the Sandhill region there that you wouldn’t know what to do with it,” Peek said. “Calves sold very well in the Nebraska, Kansas and Colorado area. There is some drought in the Nebraska panhandle, but that didn’t seem to hurt local demand too much.” Peek said that in areas further west, calves were a tough sell. “Areas in Utah, Nevada, California—some places in eastern Oregon as well... We’ve got an unbelievable drought in that area and we had a tougher time selling calves there as a result. We still sold the calves, but the market simply wasn’t as good as it is on the Plains. I think the corn report did a good job spurring demand, although calves out west didn’t see much of a boost because to get them to the Plains to go on feed would simply cost too much,” said Peek. The market for yearlings is getting tight due to a limited supply, according to Peek. “There are not any yearlings to be had in the west. Anything that was available for sale has already been sold and is being delivered about now. We’re really busy shipping cattle right now. I think we had maybe nine lots of yearlings in the western region sell this last time around; so the prices are quite high for them because you have to pay for them if you want the few yearlings that are left,” Peek explained. Peek also said WVM had a packed house for the first day of the sale when the calves were shown, but fewer people were on hand the second day to bid when yearling cattle were auctioned. Good examples of the strong market were 2,561 head of feeder steers weighing 550-585 which sold for an average of $129.95 with an October delivery date. One lot of 800 lb. feeders sold for $116 with a December delivery date attached. A group of similar 800 weight cattle sold for less in the western region, bringing a $106.95 average. Heifers did not lag nearly as far behind at the WVM sale as they have at most auctions during the duration of this market trend, with most heifer calves hanging within a couple dollars of their brothers. Derrell Peel, marketing specialist with Oklahoma State University, says that while things remain strong in the feeder cattle market right now, there could be a little bit of trouble brewing. “The interesting thing that we’ll see in the markets going into the spring is competition for acreage between wheat, corn, and soybeans. There’s almost no way that corn will keep the same acreage it had this year, and there will have to be a significant run-up in the corn market in order to buy acreage away from soybeans, which look really attractive right now,” Peel says. “The effect this is going to have will be some sort of drop in the feeder cattle market when we see this price increase in corn. A year ago in October when we saw corn spike, the feeder market reacted negatively all winter until it corrected come about February. I think last time, it reacted mostly out of surprise. This time, we know why the situation exists and I don’t think the depression should linger for any more than a month at the most. Long story short, there is definitely a strong potential for a short-term shake-up in the market, but underneath it all is still a very tight supply of feeder cattle, which should keep things from dropping too far or too long,” explained Peel. Peel also said that wheat production issues in the southern Plains are keeping some confused about whether there will be wheat available for grazing. “Conditions have been mostly good for wheat. We’ve had good moisture—in some cases too much moisture—which is helping farmers feel good about their grazing prospects this winter. The problem is that guys are way behind on their farming; weed control and planting issues, along with a severe lack of seed wheat, has put things behind on time. It’s likely that the wheat grazing season may be shortened, as farmers wait to make sure they get the wheat out of the ground before they throw any calves out there,” Peel says. In Oklahoma City two weeks ago, the cash cattle trade was dampened by the surprising news that a record corn report had actually caused a short-term price spike in the CME corn markets. The result was feeder receipts showing steady demand but slightly lower prices. Auctions elsewhere around the country were quite limited in the supply of cattle and did not receive good tests on average, although most markets were steady and in some cases, lower. The market for the 10,068 head offering in Oklahoma City last week was similar, posting prices $1-3 lower on the larger feeder steers and heifers. Steer calves were steady to $1 lower, and heifer calves dropped $2-5 lower. All classes of feeders closed at the full decline. Demand at the Monday and Tuesday auctions was moderate, with the best demand coming for the steers. Buyers were selective for kind and condition, with orders for cattle seeming to run out late in the sale. Weigh ups were reported as mostly average to full, with a larger number of native calves beginning to show up as the fall weaning season approaches. Weather in the area was warm and dry with cool nights, and wheat planting is now finally underway in most parts of Oklahoma. A large load of 830 lb. steers sold for an average of $113.68, and a lot of six-weight calves sold for $121. In Joplin, MO last week, 6,341 head sold, with steer and heifer calves $1-3 lower, with yearlings steady on moderate supply and demand. As is typical for this time of the year, fleshy, unworked calves made up most of the lower market. Six-weight steers sold for $122.75 and 800 lb. feeders sold at $114.30. Heifers of 600 lbs. brought receipts of $113.21. Last week in Torrington, WY, steers were unevenly steady on a very limited test, with receipts on heifers steady to $1 lower. The 1,442 head total supply showed considerable fill and demand was good. One larger lot of heavier nine-weight feeder steers brought $113.23. At the Central Oregon Livestock Auction in Madras last week, 716 head sold, with 600-700 lb. steers bringing $98-103, and heifers bringing the same price—steers of heavier 800-900 lb. weights kept up with the lighter classes, topping out $2 lower at $101 on a light test. Peek’s comments about the western drought hurting feeder prices were echoed in Famoso, CA, last week, where a trend similar to that in Oregon was seen, with 700 lb. feeder steers sold at $106, with one lot of 516 lb. heifers selling for $107.25. Both classes of cattle were very lightly tested.

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Thursday, December 20,2007

Hereford tour goes from pasture to plate

by WLJ
Sheep producers in 16 Montana counties are not allowed to move their sheep within or beyond their county lines until Oct. 10 because of a recent bluetongue outbreak. “Test results on Tuesday (Sept. 18) confirmed bluetongue in sheep from Musselshell County, and we’ve gotten reports of sick sheep and preliminary test results from several additional counties, so I’ve chosen to expand the hold order to also include Big Horn, Carter, Carbon, Custer, Fallon, Fergus, Garfield, Golden Valley, Petroleum, Powder River, Prairie, Rosebud, Stillwater, Treasure and Yellowstone counties,” said state veterinarian Dr. Marty Zaluski. Bluetongue had already been confirmed in whitetail deer from the area last week. The disease spreads when a gnat bites an infected animal and then bites a healthy animal. Sheep, whitetail deer and antelope are especially susceptible to bluetongue; the virus may cause death if these species are exposed. Cattle, goats, mule deer and elk also can contract the disease, but rarely show symptoms and are a much lower risk in spreading the disease, said Zaluski. Humans are not susceptible. “I extended my order to keep all sheep in high-risk counties right where they are in an effort to protect livestock producers and prevent the movement of potentially sick animals into other states,” said Zaluski. “Bluetongue can be economically expensive and emotionally demoralizing. The Department of Livestock wants to do all it can to reduce the risk of spreading this virus.” Zaluski implemented a 30-day hold order for Musselshell County on Sept. 10 after screening tests indicated bluetongue was the likely cause of several sheep deaths. He has now extended the hold order geographically, but did not extend the time frame. “We expect a killing frost by Oct. 9 and that should reduce the risk of spreading bluetongue significantly,” Zaluski said. As state veterinarian, Zaluski has the authority to extend the hold order if new cases continue to appear or if a frost has not occurred in that region by Oct. 9. Producers should inspect their sheep frequently to look for signs of the virus. Common symptoms of bluetongue include a crusty, swollen muzzle, lesions or bleeding in the mouth or on the skin, and sometimes, lameness. In sheep, the mouth can become swollen and the tongue can swell and turn blue color because of damage to blood vessels and lack of oxygen. This dirty blue-colored tongue gives the disease its name—bluetongue. Livestock producers also should look for the following signs of the disease: Depression with heavy breathing or panting; High fever; Open sores on the tongue, mouth, or nostrils; Redness of the skin, face, neck, and possibly body; Lameness accompanied by an engorged reddish-blue area around the base of the horns and on the coronary bands of the feet; Loss of condition and muscular weakness; And loss of wool.

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Thursday, December 20,2007

Consumers demand tenderness rule

by WLJ
Consumers tell us that tenderness and taste are two of the most important attributes when they are evaluating their beef eating experience. They want tender beef and are willing to pay for it. That was the message Dr. Keith Belk, professor at Colorado State University’s Center for Red Meat Quality and Safety, delivered to agricultural editors and other participants at a Sensory Evaluation Briefing and Wet Lab held at Iowa State University. The training session was hosted by Elanco Animal Health as part of its continuing effort to educate beef producers on the importance of tenderness of the beef they produce. Tenderness is an important aspect of beef palatability that ultimately drives consumer satisfaction. The beef checkoff’s 2005 National Beef Tenderness Survey shows the industry has made improvements since the 1999 study, but there still are inconsistencies and further need for improvement. A key factor in beef tenderness is the aging process. Most experts agree beef becomes more tender when it is aged about 21 days. However, according to a number of meat industry experts—including the University of Minnesota Extension department—most of the beef offered for sale as retail cuts in the supermarket is aged five to seven days. Rarely is beef in the retail case aged more than 10 to 14 days. Aging isn’t the only factor driving beef tenderness. “Quality grades and marbling itself have become extremely important,” says Belk. “Prime and upper two-thirds of Choice-branded beef are in high demand and are returning larger profits back through the production chain. That’s the signal consumers are sending to us. An excellent example of that is the success that Certified Angus Beef LLC (CAB) is experiencing.” Dr. Larry Corah, vice president of supply development for CAB, says, “Our single biggest challenge is finding enough cattle that meet our quality specifications. Consumer demand for CAB products is growing faster than our suppliers’ ability to produce them. The beef industry needs to avoid using products or management practices that decrease the marbling or tenderness of the final product. Efficiency is great, but efficiency at the expense of quality or tenderness of the meat is counter-productive for the producer and for the entire beef industry.” “In the new food chain equation, it is not enough to provide technologies that only meet production challenges,” says Roy Riggs, director of Elanco’s beef business unit. “New products must also help producers meet consumers’ demand for tender, top-quality beef. We know just one bad eating experience can negatively impact all segments of the food chain. That’s why Elanco is committed to developing production inputs that not only improve animal health and performance, but also maintain or improve the palatability of the meat products.” Elanco believes that sensory evaluation training programs like the one held recently at Iowa State University are an important part of producer education. Riggs says, “We believe that the first critical step in maintaining beef quality is to raise producer awareness of the importance consumers place on tenderness and how tenderness can be measured and managed. We know today’s consumers have many choices of protein. If we want their first choice to be beef, we need to help our producers deliver the tender, tasty product consumers demand each time they purchase beef.”

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Thursday, December 20,2007

Bluetongue confirmed in Montana sheep

by WLJ
Sheep producers in 16 Montana counties are not allowed to move their sheep within or beyond their county lines until Oct. 10 because of a recent bluetongue outbreak. “Test results on Tuesday (Sept. 18) confirmed bluetongue in sheep from Musselshell County, and we’ve gotten reports of sick sheep and preliminary test results from several additional counties, so I’ve chosen to expand the hold order to also include Big Horn, Carter, Carbon, Custer, Fallon, Fergus, Garfield, Golden Valley, Petroleum, Powder River, Prairie, Rosebud, Stillwater, Treasure and Yellowstone counties,” said state veterinarian Dr. Marty Zaluski. Bluetongue had already been confirmed in whitetail deer from the area last week. The disease spreads when a gnat bites an infected animal and then bites a healthy animal. Sheep, whitetail deer and antelope are especially susceptible to bluetongue; the virus may cause death if these species are exposed. Cattle, goats, mule deer and elk also can contract the disease, but rarely show symptoms and are a much lower risk in spreading the disease, said Zaluski. Humans are not susceptible. “I extended my order to keep all sheep in high-risk counties right where they are in an effort to protect livestock producers and prevent the movement of potentially sick animals into other states,” said Zaluski. “Bluetongue can be economically expensive and emotionally demoralizing. The Department of Livestock wants to do all it can to reduce the risk of spreading this virus.” Zaluski implemented a 30-day hold order for Musselshell County on Sept. 10 after screening tests indicated bluetongue was the likely cause of several sheep deaths. He has now extended the hold order geographically, but did not extend the time frame. “We expect a killing frost by Oct. 9 and that should reduce the risk of spreading bluetongue significantly,” Zaluski said. As state veterinarian, Zaluski has the authority to extend the hold order if new cases continue to appear or if a frost has not occurred in that region by Oct. 9. Producers should inspect their sheep frequently to look for signs of the virus. Common symptoms of bluetongue include a crusty, swollen muzzle, lesions or bleeding in the mouth or on the skin, and sometimes, lameness. In sheep, the mouth can become swollen and the tongue can swell and turn blue color because of damage to blood vessels and lack of oxygen. This dirty blue-colored tongue gives the disease its name—bluetongue. Livestock producers also should look for the following signs of the disease: Depression with heavy breathing or panting; High fever; Open sores on the tongue, mouth, or nostrils; Redness of the skin, face, neck, and possibly body; Lameness accompanied by an engorged reddish-blue area around the base of the horns and on the coronary bands of the feet; Loss of condition and muscular weakness; And loss of wool.

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Thursday, December 20,2007

Humane animal treatment

by WLJ
— Legislation proposed in Arizona. While most of the country was focused on the devastation Hurricane Katrina created, an Arizona animal rights group, Arizonans for Humane Farms, was busy filing proposed legislation in Arizona courts which would make many confinement farming practices illegal. The Humane Society of the U.S. and the Farm Sanctuary were also behind the proposal. The legislation will be known as the Humane Treatment of Farm Animals Act. If put into effect, it will have profound implications on most hog and dairy calf raising operations in the state. Specifically, the act states “a person shall not tether or confine any pig during pregnancy or any calf raised for veal on a farm for all, or the majority of any day, in a manner that prevents such animal from lying down and fulling extending its limbs or turning around freely.” The legislation will not apply to animals on exhibit, being transported or involved in rodeo events. Any violation of the act will be a class one misdemeanor. The Arizona Cattle Feeders Association, (ACFA) was quick to react to the proposal. Current president Norman Hinz said, “When all efforts should be focused on alleviating the suffering in Louisiana, Mississippi and Alabama, these radical groups come along and promote an initiative that does not provide for improving animal welfare on Arizona’s farms and ranches. It is purely a political stunt attempting to stigmatize animal agriculture. We invite these groups and applied science efforts to join in our attempts to improve animal health and animal husbandry. The ACFA criticized the initiative stating, “Arizona’s feedlots follow a standard of allowing 80- 150 square feet of space per animal; yet these animals are often found laying down much closer than that density by choice, leaving open spaces at other corners of the pen, responding to their herding and protective instincts. Arizona’s beef producing families have learned animal science at our Land Grant Universities and carried it back to both family, corporate family, and ranches across our state,” said Hinz. Arizona Cattle Growers Association President, Bill Brake, said, “These groups have never reached out to Arizona’s beef producing families in an effort to improve animal welfare, and animal welfare will never be achieved via Arizona’s criminal code—it will be achieved through the continued investment of research and teaching at the Land Grant Universities.” Brake also said, “It’s unfortunate that these radical animal rights groups will attempt to lead well-meaning people who have not been around animals in a production agriculture setting enough to understand how animal sensitivities differ from ours.” The group, organized as Arizonans for Humane Farms, has started a petition drive to require that these animals be able to lie down and fully extend their limbs. It needs 122,612 valid signatures by July 6, 2006 to put the measure before voters at next year’s general election. If the measure is approved, it would give existing farms until 2013 to bring their management practices into compliance. Cheryl Naumann, president and chief executive officer of the Arizona Humane Society, said last week, “The goal of the initiative is not to interfere with legitimate farming, or even to stop the slaughter of animals for food. But the animals raised to become dinner should not be made to suffer. Naumann also said the proposal should be seen as supportive of family farms and that most small operations treat their animals humanely. It is large-scale operations, which are less sensitive to animal rights, that end up putting the small rural farmer out of business.” Naumann said coalition members, including the Humane Society of the United States, the Animal Defense League of Arizona and Farm Sanctuary, believe state protections for farm animals are needed. “There is nothing quite as horrifying as the amount of suffering that takes place every day,” she said. — Pete Crow, WLJ Publisher

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Thursday, December 20,2007

Fed and feeder cattle rally, on good demand

by WLJ
week. Feeders didn’t have to play the hold out game with packers as they came to the table relatively quick, moving fed prices up $2-3 to $87 live and $136 to $137 dressed. Over 150,000 head traded on Wednesday. All signals were go in the markets—lower cost feed, stronger futures markets, stronger boxed beef markets, strong slaughter—nearly every indicator suggested an improved market. Futures markets were much higher with the October live cattle reaching $86.38 and the February contract was a dime short of $90. Feeder cattle just keep getting stronger with September at $115.37, a contract high. Ann Barnhardt, an independent analyst in Denver, CO, said that cattle feeders are in a great position with fed cattle prices rallying upward. However, she warned, they have to be careful not to give it back buying high priced feeder cattle. A week earlier, during the Labor Day-shortened week, fed trade got under way late Friday afternoon at $84.50 live and there were also good volumes traded. The fed market showed significant strength over the following six days. Less expensive feed costs are helping feeders hold the line. Sources tell us that the fed cattle supply is smaller and feeders have the luxury of holding cattle over because of lower feed costs. It has nothing to do with feeders being current on marketings. There have been reports of corn trade at $1.40-1.50 per bushel. Clearly packers needed cattle; buying cattle on a Wednesday and adding $2-3 sends a very positive signal to feeders. Carcass weights should be reaching a seasonal high. The week ending Sept. 3, carcass weights were up 2 lbs. at 834 lbs. The week of Sept. 9, southern Plains live cattle weights were 9 lbs. lower than the prior week. With the price moving up this quickly, cattle supplies are starting to be questioned. The cattle on feed report, due out later this week, was expected to show cattle on feed dead even with last year’s Sept.1 report. Marketings and placements were expected to be 1% lower. Slaughter levels remained fairly large with the holiday-shortened week processing 577,000 head, which was a great improvement over the prior year’s 541,000 head. Daily slaughter last week averaged 123,000 head a day. The packer margin index showed packers earning $11.10 a head on an average buy of $83.03. Boxed beef values gained a couple dollars with the Choice cutout moving up to $140.56 and Select at 129.39. Most of the meat trade was with the Select product. Trade volume has been very good signaling good demand. Feeder Markets The feeder market continues to roll along, oblivious to any of the obstacles in its way. Prices in the last two weeks have pushed back to near or above historical highs, and calves are coming to the market just in time. In the northern tier states, sales are beginning to pick up as producers are starting to send their calf crop to town. Sales in the Dakotas were noting prices for 700-800 lb. steers trading in a range of $119-123, while 600-700 lb. heifers traded for $123-127. Few trends were available due to fact it is early in the season, however, most sales noted good demand and active trade for offered lots. In Colorado and Wyoming, markets experienced similar strength with several uneven lots in La Junta, CO, bringing between $115 and $130 depending on quality. Torrington, WY sales brought prices $2-4 higher for feeders over 700 lbs. In Famoso, CA, Dwight Mebane, at the Western Stockmen’s Market said West Coast volume was seasonally light, but sales of available cattle were very strong. At Famoso, 800 lb. feeders traded in an average range of $103 to $105. Lighter feeders brought excellent prices; steers in the 500 lb. range brought an average of $135. In the southern tier last week, a cold front dropped more than an inch of rain in many key areas, adding to the optimism. At El Reno, OK, market analysts noted very good demand for all classes of feeder cattle. Buyers pushed prices for steer and heifer calves $2-10 higher on increased numbers of good quality lots. In Missouri, buyers at the Joplin sale bid prices $2-4 higher on steers under 650 lbs. One of the few down notes of the week came at this sale—heifers under 600 lbs. were called $2-4 lower, while heifers over 600 sold at prices steady with last week. Markets across Texas and the remainder of the southern tier also noted similar prosperity last week. Analysts noted that solid grazing conditions on winter wheat pasture, coupled with sliding corn prices, are improving the picture for feedlots and supporting the current market. Don Mason, director of grower services for Iowa Corn Growers Association, said last week that a backlog of corn in Midwest elevators, combined with high energy prices, are hurting growers in his state, although now that Mississippi River traffic is moving again, he expects the impact to lessen some. The major problem for growers right now is facing the impact of rising energy prices. He expects that increases in fuel and natural gas are adding an extra $12-14 per acre to the cost of corn. “The major impact on transportation and basis is just disgusting,” said Mason. Although it is not uncommon for feedlots in Iowa to direct contract with growers to secure corn for the winter, he expects an increase in the number doing so this year as Iowa yields are looking pretty good. The transportation factor, which many analysts believed would bring feeder prices crashing down, does not appear to be dragging on the market as much as some thought it would. In California, Mebane believes that high fuel costs haven’t affected the market at all. “Trucking costs don’t seem to be stopping buyers,” he said. — WLJ © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Thursday, December 20,2007

Beef Bits

by WLJ
New Zealand’s beef import volume in 2006 is forecast to increase 7%, to 615,000 tons, according to a USDA report. The New Zealand Food Safety Authority (FSA) recently completed an assessment of the U.S. BSE regime and determined that U.S. safeguards were equivalent to those provided by New Zealand’s BSE measures. Following a certification agreement, FSA will remove its case-by-case assessment requirement for imports of U.S. beef and beef variety meats, which will allow for U.S. beef to cross New Zealand borders.   Mexico beef, cattle exports to grow Mexico continued to relax its import restrictions on U.S. bovine products during 2005, and beef imports are expected to climb to 350,000 tons in 2006, up from 2005 levels but still below pre-BSE levels, according to a report from the USDA. Mexico’s cattle exports are expected to remain strong during 2006 as exportable supplies of calves are good and grazing conditions have benefitted from favorable weather conditions.   Nitrites could save human lives The National Institutes of Health (NIH) have begun using sodium nitrite, a popular compound used in hot dogs and other processed foods, on volunteers in hopes of developing a treatment for a variety of human sicknesses, including sickle cell anemia, heart attacks and aneurysm. The commonality between these ailments is low oxygen, a problem research suggests nitrites can ease by preventing cellular death in oxygen-starved heart, brain and lung tissue. NIH researchers have filed for new patents on the chemical and are looking for a major pharmaceutical company to develop it as therapy. NIH officials, however, are so convinced of nitrite’s promise that they will pursue drug development on their own if necessary.   Burger King targets Chinese Burger King said recently it plans to open 1,000 stores in China by 2015. The fast food chain presently has one store in Shanghai, its only unit on mainland China. An additional 10-12 Burger King restaurants are expected in Shanghai by the end of this year. At present, all Burger King units are company-owned. China’s Ministry of Commerce issued regulations on commercial franchises earlier this year, requiring foreign companies to have at least two company-owned outlets running for one year or more before opening franchises. Burger King will not qualify until next July.   McDonald’s sales greater in August McDonald’s has said global systemwide sales for its restaurants rose 5.7% in August, or 4.4% in constant currencies. August comparable sales rose 3.4%, with U.S. comparable sales increasing 3.2% and Europe comparable sales increasing 3.6%. Comparable sales represent sales at all McDonald’s restaurants in operation at least thirteen months, excluding the impact of currency translation. Systemwide sales include sales at all McDonald’s restaurants, including those operated by the company, franchisees and affiliates.   Dakota Beef launches organic line Dakota Beef LLC, Howard, SD, has announced the launch of its Certified Organic Beef program at the new Whole Foods supermarket in Columbus, OH. The Columbus store will feature a full range of steaks, roasts, and other cuts from Dakota Beef, which is the store’s sole beef provider. In another part of the store, organic all-beef frankfurters supplied by Dakota Beef will be offered.   Sirloin a big hit at Boston Market Restaurant chain Boston Market and the Cattlemen’s Beef Board (CBB) recently announced that this summer’s joint promotion of several new beef sirloin products has been very successful. In June, the restaurant chain introduced 5- and 8-ounce lean steak entrees—a BBQ Sirloin and Cheddar deli-sliced carver sandwich and a Sirloin Dip carver sandwich. The sandwiches were unveiled at all 630 Boston Market locations across the U.S. Within the third week of its introduction, the sirloin items had reached double digits in terms of overall product mix across the Boston Market system. Officials with the CBB said the promotion has been very successful, particularly with Boston Market being most known for its chicken offerings. © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Thursday, December 20,2007

Cash cattle prices dip

by WLJ
September 18, 2006 The contract versus cash basis levels that had been encouraging feedlots to hold cattle and add weight finally reversed last week and cash is once again “king.” The live cattle contract trade slipped below cash prices in a big decline on Wednesday last week and the move almost immediately spurred sales of live cattle last Thursday morning.   Cash trade in the north developed in a range of $138-140 live. Bids in the south, as of press time, were narrowing the gap between ask and offer. Bids were up to $88 and offering prices stood in a range of $90-91. Trade was expected in the $89-90 range in the southern tier. Prices last week were expected to be down $1.50 to $2.50 from the previous week. According to HedgersEdge.com, packer margins slipped solidly into the red. On Thursday last week, packers were estimated to be losing $20.15 per head harvested. Losses were created by the high prices paid by packers over the last several weeks and failures at the packer level to boost carcass cutout values. Despite cutbacks in slaughter volume last week, including reports of dark plants, the Choice and Select cutout values turned sharply lower last week. Thursday's kill was scaled back to 128,000 head. For the week to date, USDA estimated harvest at 499,000, up from 388,000 head the prior week which was shortened by the Labor Day holiday. Large cuts in the harvest speed over the past several weeks haven't achieved the desired results and Choice cutout values had slid to $146.36 by Thursday last week. That's a decline of more than $2 from the previous week when USDA estimated harvest at 591,000 head the week ended Sept. 9. Select values were also lower, trading at $136.85, down $1.27 from the week prior. Despite the slump in cutout values over the last week, prices remain well above year ago levels. The same week in 2005, Choice boxed cutout values were $140.56 and Select was trading at $129.39. There were some reports last week of large supplies of Select product in the pipeline leading to additional weakness in the boxed beef cutout. If those prove to be true, it is likely to add to the decline in cutout values in the weeks ahead.   Some of the strength can be attributed to rising prices in other proteins. Jim Robb, director of Livestock Marketing Information Center, said increases in the boneless, skinless chicken breast prices, as well as stronger pork values, had lent some support to the beef market. This is particularly true with the end meats, which will continue to gain favor with retailers and consumers as the weather cools.   "Competing meats are certainly less of an issue than they were early in the year. Now with boneless, skinless chicken breasts up around $1.50 per pound, beef prices don't seem quite as high for consumers," Robb said.   Unlike the competing meats, the market opening in South Korea did little to move the markets last week. Because export volumes are expected to be very small for the near-term, as are shipments to Japan, it is doing little to boost prices. However, as volumes begin to increase, so will the value added to beef values domestically. Just two weeks ago, the popular beef bowl made with U.S. beef was added to the menu at Yoshinoya, a leading Japanese fast food chain. Demand for the product was so strong, a million servings were expected to sell out in a single day.   As previously mentioned, the Chicago Mercantile Exchange (CME) trade last week was mostly lower for the week as cash values declined. Fund selling as contracts dropped below critical support levels added to the weakness in the market. Last Thursday's session saw both the October and December contracts close below their 40-day moving averages. Contracts were down across the board with October leading the way down, off 107 points to $89.25. December was 60 points lower, to $89.25, and February was also down 60 points, to $90.27, at the end of the session. Feeder cattle Economists say feeder cattle have appeared to have reached their seasonal highs but far later than most analysts had anticipated. Feeder cattle have been on fire, according to livestock auction markets, and the reasoning is up for speculation. The CME shows futures down significantly from the week prior but auctions are still rolling on and even up $2-3, and as much as $7 in others.   In Carthage, MO, at the Joplin Regional Stockyards, steers of all weight classes and heifers over 550 lbs. were $1-3 higher, heifers under 550 lbs. were $1-3 lower. Demand was moderate to good, supply moderate to heavy. Market officials said dry pastures are still the norm and chances of rain are in the forecast, but it "may be too little, too late." In the country's largest livestock auction market, Oklahoma National Stockyards, 11,500 went through the ring last week, up nearly 250 from the week prior. Feeder steers and heifers were up as much as $7 per cwt. For the most part, steers and heifers were $3-6 higher. Steer and heifer calves in Oklahoma City were steady to $2 higher with good demand.   In Philip, SD, at the Philip Livestock Auction, 4,763 sold, up significantly from the prior week’s 1,897 head. Feeder calves and yearlings sold mostly steady with the 950- 1000-lb. heifers selling $3. Feeder cows sold $1-2 higher. Market officials said like “usual, calves with all the shots were in demand.”   Last Tuesday at the Live Oak Livestock Auction located in Three Rivers, TX, 2,205 head sold compared to only 752 last week. Compared to last week, feeder steers and heifers were steady to firm. Feeder cattle accounted for 77 percent and slaughter cows and bulls, 23 percent of the run. In the feeder supply, steers made up approximately 57 percent of the run, heifers 43 percent; steers and heifers over 600 lbs. totaled approximately 6 percent.   At La Junta Livestock Commission in Lajunta, CO, steer and heifer calves sold steady to $1 higher. This week's supply in La Junta included 80 percent feeders, 20 percent slaughter cows and bulls. In the feeder supply, steers made up approximately 75 percent of the run, heifers near 30 percent.   Although prices suffered on the board last Thursday, auction markets still witnessed very positive prices. Markets also witnessed a higher number of head go through the ring as a result of producers trying to take advantage of the very positive market prices before they begin the downward cycle, according to Jackie Moore, co-owner of the Joplin Regional Stockyards. Due to recent rains in the central Plains, producers are purchasing stockers to get ready for winter grazing. In drier areas, the prices are staying strong due to increasing demand, in part due to South Korea opening their doors to U.S. beef.   On CME, prices were lower across the board. September contracts traded 85 points lower to settle last Thursday at $117. Even lower were October contracts, which dropped $1.45 when compared to the prior day's $116.75. October closed at $115.30. November contracts suffered the most, dropping nearly $1.60 from $116.50 last Wednesday. Thursday trading stopped at $114.93.   Futures are predicted to have gone as high as they are going to go for the season, but in reality, livestock markets are strong, with few predictions as to how long this can keep going on.

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© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.